You know your nonprofit operates ethically, but putting it in writing is essential! While you may be confident in your organization’s integrity, implementing a code of ethics offers numerous 
advantages. It can help deter fraud, guide decision-making for your staff, and reassure donors and stakeholders that your organization upholds its core values. If you’re ready to create a code of ethics, here’s how to proceed.
Turning Values into Action
What’s the distinction between a mission statement and a code of ethics? Although you likely have a mission statement that outlines your values and goals, a code of ethics serves a different purpose. It defines how you, your staff, volunteers, and the board of directors enact those ideals and translate values into practice.
Begin crafting your code of ethics by reviewing your strategic plan and mission statement to pinpoint the specific ideals that resonate with your organization. Consider, examining peer nonprofits to identify shared values, such as:
- Fairness and justice
- Commitment to the community
- Accountability to the public
- Compliance with the law
Additionally, consider the ethical expectations within your industry. For instance, if your staff requires licensing, ensure compliance with those standards. You may also want to incorporate practical guidelines addressing current issues or behaviors typical in your workplace, such as collaboration and timeliness. While these principles may not directly pertain to ethics, they contribute to your nonprofit’s overall image.
Key Considerations
The nature and scale of your organization will influence the breadth of your code of ethics. However, most nonprofits should encompass general areas, including mission, governance, and legal compliance.
You should also address potential conflicts of interest, such as compensating board members for their services, responsible fund stewardship, and transparency in disclosures. Additionally, inclusivity and diversity are recognized as essential components of a nonprofit’s code of ethics. For each of these subjects, outline how you will adhere to legal standards, maintain accountability to the public, and manage resources responsibly.
Finalizing and Training
Once your code of ethics is complete, it must receive formal approval from your board. Conduct training for staff, volunteers, and board members to ensure they understand the code and the consequences of violations, which could include termination. Display your code prominently, such as on your website, so that the community can see your organization’s commitment to its values.
Still unsure about how to begin? Or worried about specific actions that could threaten your organization’s tax-exempt status? Don’t hesitate to reach out for guidance from your financial and legal advisors.
